This sharp smell immediately hits your nose. Paint? In a heavily secured hall full of tens of thousands of screens, printers, laptops and cell phones, that seems unlikely. Ultimately, CHG-Meridian wants to resell the used devices here. The company from Weingarten in Upper Swabia (Ravensburg district) equips companies worldwide with new IT and markets the old one – an internationally growing market.
“Here, we ensure that used devices have a second or third life cycle,” says Christan Brakensiek, the company’s head of sales for German-speaking countries. He stands next to a few pallets of old devices at the goods entrance to the hall, called the technology center. A forklift whirs past him. Behind hundreds of screens set up in a herringbone formation is the source of the smell: large Label-Ex spray bottles. Four women remove stickers from used equipment.
The consultants at Credence Research estimated the global market for used IT at 271 billion dollars (233 billion euros) in 2024, and by 2032 it will be 475 billion dollars. Many companies don’t necessarily need the super-fast latest laptops, but rather reliable, solid work devices. And of course it’s about money. “Used goods are typically 20 to 50 percent cheaper than new devices,” says Brakensiek. The hall here in the Groß-Gerau industrial area south of Frankfurt is one of the largest of its kind. The used equipment is located on two levels in an area the size of around two football fields.
Those who are cheap can compete in the market. “We have industrialized refurbishing,” says Brakensiek, which for him is a major competitive advantage. Everything is always the same: delivery by truck, recording of the devices, sticking on your own label with barcode, cleaning, visual inspection, securely deleting data, technical inspection, packaging. “This is a closely timed process,” adds Csaba Kallai, who heads the technology center. “We have to be quick. The prices for used equipment are also falling quickly.”
Around 816,000 devices will be processed in 2024
In 2024, the 140 employees here processed around 816,000 devices. On this day, there are a good 54,000 notebooks stored in the hall, as Kallai shows on his tablet, 23,000 cell phones, 17,000 monitors and 2,700 printers – from tabletop devices to cabinet-sized machines with a sorting unit. Plus standing computers and mountains of power supplies.
To the sound of the barcode scanners beeping at the goods entrance below, Brakensiek and Kallai walk on the upper level past rows of notebooks whose screens glow red during the deletion process. At the cell phone station, boxes are stacked with phones and tablets, mostly from the US provider Apple. Six employees try to clean the devices and prepare them for resale. This is also where the limits of recycling become apparent. “If we can’t unlock the cell phones and tablets, they go into the shredder,” says Kallai. And many devices are missing their access code when they arrive here in Groß-Gerau. Rubbish, although they still look excellent.
CHG: IT leasing provider with 1,600 employees
CHG-Meridian started as a computer dealer in the Ravensburg district in 1979. Over the years, the company transformed into an international IT leasing provider with 1,600 employees. The Upper Swabians buy the devices, finance them with banks, and lease them to corporate customers who pay a monthly amount. After a few years, the devices come back to CHG – in Groß-Gerau from ten European countries.
The refurbished devices go directly or through auction to companies, which perhaps sell them on individually to private individuals or, like CHG subsidiary Circulee, on a large scale to corporate customers who equip their offices. Brakensiek and Kallai talk a lot about assets instead of cell phones or screens and brokers instead of commercial customers. And the business actually has something of a stock market feel to it. “The prices are lower in summer, for example,” says Brakensiek. A separate unit at CHG takes care of the right time for the sale. Because the proceeds benefit the company.
Upper Swabia offers IT in 190 countries
This has to do with the business model. CHG-Meridian earns money from leasing fees for new goods. It has already been taken into account that the devices will later be sold at a certain residual value. This reduces the leasing rates for customers. If used laptops, monitors and phones can be resold at a higher price than originally planned, CHG earns additional money.
And how does the company estimate the residual value of thousands of computers five years in advance? “We have 40 years of experience looking into the crystal ball and predicting which market will develop and how,” says Brakensiek. Apparently successful. CHG-Meridian operates directly in 32 countries, including India and Australia, the USA, Canada and Brazil. IT is offered in 190 countries via partners.
The approximately 5,000 customers in Germany and around 1,500 others globally often include very large corporations with locations worldwide. By the end of 2024, the company will have financed technical devices worth 11.73 billion euros. Brakensiek estimates new business in 2024 at 2.83 billion euros. 94 percent of the devices that are delivered to the front of the hall end up neatly packaged for delivery at the end of the hall. Commercial customers can then pick them up here – for payment in advance.
